The Crowding-Out Effect of the Public Debt May Be Dampened

question 183

True/False

The crowding-out effect of the public debt may be dampened if the investment-demand curve is shifting to the right.

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Definitions:

Production Possibilities Line

A curve depicting all maximum output possibilities for two goods, given a set of inputs.

Trading Possibilities Line

A graphical representation showing the combinations of goods that a country can produce or trade given the resource constraints and technology.

International Trade

The exchange of goods and services between countries.

Domestic Production

It refers to the total value of all goods and services produced within a country's borders in a specific time period.